Europe now costs US$12.76 a watt to build data centres, 29% above the Gulf. EU rules close 14 December

Europe has become the most expensive place in the world to build a data centre, region by region. A typical 60 MW facility now costs about US$170 million more to build in Europe than in the Gulf, and almost US$404 million more in Zurich than in the UAE (our calculation from Turner & Townsend’s 2026-27 index).

Why now: the index, published on 22 October and launched with a release on 26 October, is the first full read of 2026 build costs across 62 markets. It lands as the EU writes new efficiency rules for the sector, with a consultation closing on 14 December, and as bids for the EU’s AI gigafactories come due. Every one of those sites will be priced against the numbers below.

What the index measured

Turner & Townsend, the construction consultancy, prices a typical 60 MW data centre design in each market and expresses the result as US dollars per watt of capacity. The 2026-27 edition covers 62 markets, 12 of them new, including Barcelona, and draws on about 500 live or recently completed projects and a survey of 401 industry experts, the firm’s index page says. It is the tenth edition.

The top of the table is crowded with Europe. Seventeen European and 13 North American markets make up almost half of it, Turner & Townsend said on 26 October. Five European cities are in the global top ten: Zurich, Copenhagen, Oslo, Stockholm and Helsinki, Construction Briefing reported. Only Tokyo (US$18.28) and Osaka (US$17.15) cost more than Zurich.

Europe’s regional average reached US$12.76 per watt, up 13% year on year, the largest regional rise in the index, Construction Briefing reported. Asia averaged US$12.10, North America US$12.06 and the Middle East US$9.93. On those figures Europe’s average a year ago was about US$11.29 (our calculation), so a European build now costs about US$1.47 more per watt, or US$88 million more for 60 MW, than it did in 2025.

Europe: dear, and getting dearer

Zurich is the clearest case. The 2025 edition put it at US$14.20 per watt, Turner & Townsend’s 2025 report shows; at US$15.93 this year it is up about 12% (our calculation). Copenhagen comes in at US$14.41, fifth in the world, Property Wheel reported. The two big FLAP-D hubs sit near the European average: London at US$12.95 (15th globally) and Frankfurt at US$12.49.

For the rest of the main hubs, the 2026 figures were not in the public material we could read. Last year’s edition had Oslo at US$12.40, Paris and Amsterdam at US$10.80, and Madrid and Dublin at US$10.00. If they rose in line with the 13% regional average, Paris and Amsterdam would now be about US$12.20 and Madrid and Dublin about US$11.30 (our estimate, not index figures).

Turner & Townsend puts the rise down to scale and scarcity. AI campuses need gigawatt-level power and liquid cooling for denser racks, and fewer contractors can build them.

Europe’s labour problem is the sharpest. Across the survey, 81% of respondents said skilled labour in their region was moderately or highly constrained. In North America only 26% said regional contractor capacity was sufficient; in the UK and Europe the figure fell to 19%, the release said. More than half (56%) named power as a major obstacle to delivery, 52% said utility connections typically take one to two years, and 32% said more than two years.

The Middle East and Africa: the low-cost end

The Gulf sits at the other end of the table. The UAE, at US$9.20 per watt, ranks 58th of 62 and is the fifth-cheapest market in the index; Qatar is 53rd at US$9.80 and Saudi Arabia 40th at US$10.80, Consultancy-ME reported. Turner & Townsend credits lower labour costs in its release, and its regional lead adds cheap energy.

Coary also warned that the low base is not fixed: “structurally higher construction costs and risk are increasingly priced into contracting”, he told Utilities Middle East. The gap is still wide. The UAE builds a watt for 58% of Zurich’s price and 71% of London’s (our calculation).

Africa’s main hubs are close to the Gulf. Lagos is at US$10.87, Cape Town US$10.70, Johannesburg US$10.62 and Nairobi US$10.03, all in the lower third of the index, Property Wheel reported. Lagos is moving the other way in the ranking: 7th in 2024, 27th in 2025 and 42nd in 2026, as other markets got dearer faster. Its own cost rose from US$10.50 to US$10.87, about 3.5% (our calculation), a quarter of Europe’s rise.

Sources: Turner & Townsend Data Centre Construction Cost Index 2026-27 (release 26 Oct 2026; index page 22 Oct 2026) as reported by Construction Briefing, Consultancy-ME and Property Wheel; 2025 figures from Turner & Townsend’s 2025 report. n/a = not in the public material we could read. Lagos rank 42 is from Property Wheel; Construction Briefing lists Saudi Arabia 40th. 60 MW cost = US$ per watt × 60 million watts (our calculation); the index’s design basis is a typical 60 MW facility, so this is an indicative shell-and-systems cost, not the price of any specific project, and excludes land, power connection charges and IT equipment.

The economics: what a megawatt costs and where the money goes

US$ per watt converts directly to US$ million per MW. A European build at the regional average is about US$12.76 million per MW; a Gulf build about US$9.93 million. At gigawatt scale, where AI campuses are now planned, the gap is about US$2.83 billion per GW (our calculation).

The building is still not the biggest bill. DC Market Insights values the global AI data centre market at US$390.19 billion in 2025 for 9.04 GW of AI IT load, about US$43 million per AI megawatt once servers, accelerators and networking are counted. On that basis Europe’s US$12.76 million facility cost is about 30% of an AI megawatt, and the Gulf’s US$9.93 million about 23% (our calculation). The cheaper shell matters, but chips, which cost much the same everywhere, dominate the total.

Running costs add to the gap. DC Market Insights estimates outsourced facility operations and maintenance at about US$115,000 per MW a year for a conventional hall and US$145,000 for an AI hall with liquid cooling, 26% more, and expects the Middle East and Africa to be the fastest-growing region for these services, at 15.38% a year to 2035. Turner & Townsend’s 2025 report put the cost of liquid-cooled facilities in the US at 7-10% above comparable air-cooled ones, and its 2026 index page puts AI-ready US facilities about 10% above traditional ones.

Capacity prices are following build costs. CBRE expected data centre capacity pricing in Europe’s five largest markets to rise by an average of 12% in 2026, the firm said in May, as operators pass higher build costs to tenants.

Sources: Turner & Townsend 2026-27 index (regional averages); DC Market Insights AI Data Center Market report (US$390.19bn, 9.04 GW in 2025); EU AI gigafactory site sizes from our 18 October analysis of the EuroHPC call. All figures are our calculation and scale a 60 MW design basis linearly; larger campuses may not be cheaper per MW, since Turner & Townsend says scale is no longer a reliable route to lower costs.

The wider pattern: power and permits, not just concrete

Build cost is one line in a site decision, and Europe’s other lines are moving the same way. Grid queues in Britain, Germany and the Netherlands now run to years, as we reported on 19 October and 26 October. New efficiency rules are coming too. The European Commission’s consultation on minimum performance standards for data centres closes on 14 December 2026, with a legislative proposal expected in the second quarter of 2027, Beveridge & Diamond noted. Tighter cooling and water limits would add equipment cost to builds that are already the world’s dearest by region.

The Gulf is using its cost edge to court AI campuses. The industry’s first Data Center World Middle East takes place in Abu Dhabi on 17-18 November, Arabian Reseller reported. Turner & Townsend’s warning about larger, riskier projects applies there as well.

Inflation has not stopped. In the survey, 52% of respondents saw cost increases above 6% in 2026 and about 20% above 15%. For 2027, 28% expect inflation of 1-5% and 57% expect it to stay below 15%, the release said. More than half (52%) expect most of their 2027 projects to be AI data centres, which are the costlier builds.

For market sizing, see our AI Data Center Market report for cost per AI megawatt, the Data Center Design Market report on how design choices drive build cost, and the Data Center Facility Management O&M Services Market report for running costs per MW. For transactions, see the Deal Tracker, and for grid and permitting rules, our Germany power and policy page and Netherlands power and policy page.

What to watch next

• 12 November 2026: bid deadline for the EU AI gigafactory call, which sets sites of up to 150 MW (the call page has also shown 3 December).
• 17-18 November 2026: Data Center World Middle East, Abu Dhabi, the event’s first edition in the region.
• 14 December 2026: EU consultation on minimum performance standards for data centres closes.
• Second quarter of 2027: European Commission proposal on minimum performance standards expected.
• Late 2027: the next Turner & Townsend index, the first test of whether Europe’s 13% rise slows, as 28% of respondents expect inflation of only 1-5% in 2027.

Frequently asked questions

How much does it cost to build a data centre in Europe in 2026?

About US$12.76 per watt on average, or US$12.76 million per MW, the highest of any region and up 13% in a year, according to Turner & Townsend. A typical 60 MW build costs about US$766 million (our calculation). Zurich is the dearest European market at US$15.93 per watt.

Where is the cheapest place to build a data centre in the Middle East?

The UAE, at US$9.20 per watt, 58th of 62 markets in Turner & Townsend’s 2026-27 index. Qatar is at US$9.80 and Saudi Arabia US$10.80. The Middle East average of US$9.93 is the lowest of any region.

How much more does a data centre cost in Europe than in the Middle East?

About 29% more: US$12.76 against US$9.93 per watt. For a 60 MW campus that is about US$170 million, and for 1 GW about US$2.83 billion (our calculation from Turner & Townsend’s index).

What does it cost to build a data centre in London or Frankfurt?

London is at US$12.95 per watt and Frankfurt US$12.49 in Turner & Townsend’s 2026-27 index, about US$777 million and US$749 million for a 60 MW build (our calculation). Copenhagen is higher, at US$14.41.